Craig Johnson

Monday, 28 November 2005 19:00

Border-crossing with your bank

In today’s world economy, business borders aren’t defined by country or even by continent. If your company is based near Canada, you probably have quite a few customers with an international address. And beyond immediate U.S. neighbors, you might fulfill orders for or purchase products from overseas vendors.

Just as customs are different in every country, so are currency and payment processes. So, what’s the difference between collecting money from a customer overseas and one in your backyard? Business is business, right?

Not necessarily.

Terminology and documents exchanged during international business transactions can easily get lost in translation. Not every organization in the world deals in U.S. currency, and obstacles to collecting payment from a foreign company are greater than when dealing with local vendors.

Banks can serve as an intermediary. By taking advantage of a financial institution’s international services, business owners enlist an adviser as they fulfill and accept transactions from international vendors.

Here are some international banking services you might consider before initiating your next global transaction.

  • Exchange services — Your bank can buy and sell foreign currency notes, allowing you to make or receive payments in Euros, Yen, Canadian dollars — most currencies in the market. For companies that require representatives to travel overseas, a bank can exchange currency before and after trips.

  • Wire transfers — If you have customers or vendors overseas, the most convenient way to pay them for products and services is through a wire transfer. Most often, transfers are in U.S. dollar denominations, but they can also be done in foreign currencies; or your bank may also sell you a foreign draft. These are checks payable in the country of the vendor. In other words, if your vendor is in China, the foreign draft check would pay this company in Yen.

When business owners have the capability to efficiently perform monetary transactions with international clients, they are more likely to earn repeat business from these companies. Also, a U.S.-based company expands its vendor options when it has the capability to easily make wire-transfer payments to foreign vendors.

  • Collections services — When an international company ships products to a U.S-based business, it also sends documents: an invoice, packing list, document of title and customs information, for example. But when you conduct business with a customer for the first time, there is a degree of mistrust from both parties. Here, the bank can serve as an intermediary.

A bank can manage the payment process, serving as a collections agency, in a sense. Documents are shipped separately from products and directly to the bank. It presents these to you for payment, and wires monies overseas. This way, both parties can rest assured that a trusted mediator is facilitating payment transactions.

  • Letters of credit — Letters of credit are similar to collections services but offer greater security to business owners. By issuing a letter of credit, a bank becomes the importer on behalf of the customer. It guarantees payment to the party overseas. A letter of credit means that a financial institution provides full faith and credit and assumes liability for the payment transaction.

The key word here is payment.

Sometimes, business owners have misconceptions about what a letter of credit really means. While banks assume liability for documents exchanged between U.S. and international clients with a letter of credit, this is not a form of insurance on products ordered from an overseas company.

Business owners can take advantage of international banking services for overseas payment transactions, which are quite a bit more complicated than those within U.S. borders. In fact, some governments mandate that international transactions must be handled through a letter of credit or collection basis; it is a way for countries to control incoming and outgoing currency. Only banks can serve in this role.

As you explore global business opportunities, consider how banks can provide a collections buffer between your company and overseas vendors. Financial institutions can alleviate uncertainty when dealing with new customers.

Craig Johnson is president and CEO of Franklin Bank in Southfield, Mich. Reach him at (248) 386-9860.

Thursday, 29 September 2005 20:00

Patriot Act Compliance

With heightened attention to financial transactions that could point to potential terrorist activity, new regulations extend the USA Patriot Act’s reach. Enhanced measures affect banks and money services customers.

Designed to prevent and detect money laundering, regulations under the Bank Secrecy Act require financial institutions to identify high- and low-risk money services businesses (MSB) and nondepository financial institutions (NDFI), assess these businesses’ transaction activity and ensure each complies with new federal requirements.

Essentially, banks are skimming their customer base to determine whether MSBs or NDFIs perform transactions that seem suspicious. (This could mean cashing one third-party check for $1,000 during a one-year period.) Banks must set up internal controls to identify, track and report suspicious transactions; MSBs must follow compliance requirements so banks can trust that their activity is legitimate.

But as both parties work to comply with Patriot Act provisions, some banks don’t want to confront serious legal repercussions and exorbitant fines of overlooking an MSB. Rather than worry about which accounts are risky business, some banks are cutting off service to MSBs. Meanwhile, these business owners struggle to find banks that will provide them services.

Are you an MSB or NDFI?

MSB designation is not limited to traditional money services businesses, such as payday lenders or wire-transfer firms. An MSB or NDFI is any business, small or large, that cashes third-party checks. This includes restaurants, gas stations and other service businesses. Banks must identify your business as an MSB or NDFI if you perform any one of the following transactions at any time, for any amount.

  • Money orders

  •  Traveler’s checks

  • Check cashing

  • Currency dealing or exchange

  • Wire transfers

Banks identify MSBs and NDFIs as either high- or low-risk accounts, depending on a number of factors. High-risk businesses are located in federally designated high-risk money laundering or drug trafficking areas, often urban environments. You are a high-risk MSB if you regularly allow customers to conduct high-amount transactions (more than $1,000 or repeated transactions just under $1,000) in high frequency, offer multiple MSB services, cash third-party checks or checks for commercial businesses, exchange currency, are a new business with less than two years at the same location or perform wire transactions.

You are a low-risk MSB if you are an established business that cashes weekly or bi-weekly paychecks, monthly bill payments and occasional gift card purchases. Low-risk MSBs offer only a single MSB service, do not accept out-of-state checks or third-party checks, only service local residents and wire funds only to domestic entities.

Whether you are classified as high- or low-risk, as long as you are an MSB or NDFI, you must put in place systems to record and ensure that all transactions are secure.

Compliance for MSBs

All business owners should perform transactions with increased awareness. Banks are monitoring MSB accounts for activity that warrants a risk-rating change. These include frequent checks from the same customer, change to multiple services and cashing third-party or out-of-state checks.

Compliance for high- and low-risk MSBs requires you to:

  • Comply with requirements set by the Bank Security Act/USA Patriot Act

  •  Apply for state and local licensing so banks can verify compliance

  •  Register with the Financial Crimes Enforcement Network (FinCEN)

  •  Purchase antimony laundering software to ensure all transactions are legitimate

Consult and prepare

Your financial institution can point you to resources and more information on how to comply with these new Patriot Act regulations. Most MSBs are unaware they perform transactions that designate their organizations as money services businesses, and fewer still have compliance methods in place.

Financial security and money laundering issues will continue to be a growing, hot issue for banks and customers who deal in transactional businesses. Proactive measures toward compliance are the best way businesses can ensure they meet requirements. A conversation with a banker will help MSBs discover if they are high- or low-risk, and how they can address their status and comply with regulations.

Craig Johnson is president and CEO of Franklin Bank in Southfield, Mich. Reach him at (248) 386-9860.

Sunday, 28 August 2005 20:00

Net Savings

Most business owners log onto Internet banking services to review their transaction histories. Viewing cashed checks and double-checking deposits online saves time and provides the most up-to-date account information.

But online banking services provide more than account history, and few small- and medium-sized business owners take advantage of more sophisticated services, including online bill payment, payroll and wire transfers, and stop-payment requests.

The tools are high-tech, but online systems are user-friendly. If you can navigate the Internet or point-and-click your way through the Web, you can utilize online banking services that will save you time and money. The key is to know what services are available so you can get down to business.

A safe way to save time
Many business owners are accustomed to weekly or even daily trips to their bank branches. They conduct transactions in person — whether deposits, transfers or withdrawals — and leave with a receipt, or proof, for their records.

Imagine the time you would save if you could eliminate this business errand and bank from your desk. Rather than waiting in line, you could allocate that time to building your business’s bottom line. Online access to transaction history means no more waiting for voicemail and automatic response systems typical of most banks. While these customer service offerings are convenient, they also consume more time than simply logging on to an online account to review records. But what about the receipt? In fact, online banking is safe, secure and still provides users with transaction records they can print and retain for reference. And because Internet banking access is limited to associates with password information, business owners can ensure that the only employees viewing transactions are those with permission. What’s more, online tools provide clear, electronic records of who makes account changes and transactions, and when someone logs on to view transaction history.

Point, click, pay
Monthly utility bills, weekly payments to vendors — writing these checks on a regular basis is labor-intensive and cost-prohibitive. Consider the online alternative. Rather than stocking paper checks, approving and verifying each check for accurate payment information and then expediting the check via mail or messenger, you can point, click and pay.

Set up recurring payments by creating a file for each vendor with information including the payee, address and dollar amount. Online banking tools will automatically pay the bill on time. If you need to change dollar amounts for each pay period, you easily can re-enter the dollar amount. Because these checks are produced and distributed electronically, there is less chance of fraud. Besides, you eliminate the expense of purchase order checks and further limit access to your checking account because you decrease the number of checks written each month.

Download and double-check
While many business owners view their transaction histories online, you can go one step further and actually view and print images of checks written and deposited.

Many banks charge customers who request cancelled checks. Avoid fees and still feed your files with printed versions of checks through Internet banking. View images of checks — front and back — and either download them to save on disc or print hard copies.

Business at your desktop
Today’s business world is dimensional; you communicate with customers by phone, through e-mail and face-to-face. Your relationship with a bank should mirror the way you do business. Besides the ability to access accounts and information over the phone and the personal value of visiting banking professionals in your local branch, Internet banking capabilities round out the portfolio of services financial institutions offer modern business owners.

Craig Johnson is president and CEO of Franklin Bank in Southfield, Mich. Reach him at (248) 386-9860.

Tuesday, 01 November 2005 19:00

Advantageous ancillary services

Your bank is more than a line of credit -- more than lender, a deposit drop spot or a place to cash checks. Banks offer business owners an array of ancillary services. Are you taking advantage of all the extras?

Offerings like lock-box services put cash flow back into your business faster; courier services take the transit time out of weekly transactions. Cash-management consultations provide you with account analyses so your hard-earned money is directed into funds that make even more money and, ultimately, help your business grow.

Lock-box service
If you generate a slew of invoices and notice they're going to a particular zip code, state or region, you will benefit from setting up a lock-box service through your bank.

Rather than directing checks to a street address, return mailings are addressed to a post office box. The bank then picks up checks on a daily basis and deposits them directly into your account.

Lock boxes are helpful invoice trackers, because banks record each deposit and distribute daily transmittals to customers. Business owners can view these transactions online. What's more, the immediacy of daily deposits reduces check float time.

Because banks collect, deposit and record receivables mailed to lock boxes each day, commercial customers get fast access to funds.

Courier service
owners gain a sense of security and satisfaction when they take checks from the office to the bank. But some days, tight schedules require entrusting checks for deposit to a staff member.

Without realizing it, you surrender the safe-and-sound aspect of personal delivery to a game of chance. What if the employee gets into a car accident -- and the check gets lost? What if the dependable staffer opts to stop at the store -- and purposely loses the check in the grocery check-out?

Courier service provides door-to-door service, from your business to the bank, and eliminates the risk and time elements of bank transactions. When you elect courier service, a provider contracted by the bank will arrive at a scheduled time -- daily, weekly or bi-weekly, depending on your depositing frequency.

An on-site log allows you to track the sum turned over to the courier. The courier then delivers checks for deposit to the bank. Should the rare occasion occur when a courier misplaces a transaction, the provider is bonded and insured to take full liability for deposits.

Cash management
Say a company needs to maintain $50,000 in its checking account for payables but its average deposits add up to $100,000.

A common mistake is to allow that additional $50,000 to stay in the account. While large numbers provide security, excess dollars won't multiply if they are not properly invested.

Your bank can perform an account analysis to help you:

  • Determine your average balance

  • Figure the amount you must retain in your account on a daily basis so all checks clear

  • Create an investment plan to divert excess funds into "sweep" accounts that pay more interest

Rather than allowing the excess $50,000 to sit in the checking account, you could apply a sweep feature to your account. At the end of each business day, the bank would transfer all funds exceeding the $50,000 maintenance amount. You could choose to flow it into an investment account or apply it against a line of credit.

Positive pay
High-volume commercial checking customers should consider ways to prevent fraud. One way is by implementing a positive pay feature.

This service permits a business owner to submit a daily record that details checks written, including amount and check number. The bank compares the account owner's record with their own in-clearing file, double-checking all dollar amounts and check numbers.

During this process, the bank can pinpoint duplicate check numbers and incorrect dollar amounts - signs of fraud.

Craig Johnson is president and CEO of Franklin Bank in Southfield, Mich. Reach him at (248) 386-9860.

Monday, 10 October 2005 10:28

Smooth transitions

If you are a business owner, you have not planned sufficiently for the future without a buy-sell agreement.

A buy-sell agreement decrees how a business, or share of a business, will be transferred upon death, disability or retirement. The agreement can be between partners, between a business entity and its stockholders, or between an owner and a key employee. It predetermines who will receive a business (or shares of a business) and how the sale or transfer will be funded.

It also provides a means for paying personal estate taxes after the transfer.

Agreement types
There are three basic types of buy-sell agreements. All determine the value of the business through an updated business valuation or formula derived from an older valuation.

The first is a stock redemption plan, which is an agreement between a corporation and its shareholders.

A second type is a cross-purchase plan, which is an agreement usually among shareholders or partners.

A third option is a wait-and-see plan. This plan offers flexibility and tax and economic advantages, combining the best from the first two options. In this buy-sell scenario, a corporation can exercise its buyback option or waive its right, thus triggering a cross-purchase option.

Regardless of which plan is chosen, business owners should consult with a professional to avoid tricky tax and procedural pitfalls. As mentioned in Limra’s MarketFacts Quarterly (2003), “Creating a buy/sell agreement without any funding consideration is like throwing a bullet instead of shooting it.”

Financing the agreement
When a business or its shares become available because of a death, surviving owners again get the first option to buy, even though the business interest is usually willed to a family estate.

Most buy-sell plans include the stipulation that surviving family members, if not previously involved in the day-to-day business operations, sell their interest to surviving owners. The cash received for this interest helps meet family estate-tax obligations and the business goes to the people best qualified to run it.

Self-funding, borrowing and insuring a buyout are the three basic ways most buy-sell plans are funded.

With self-funding, surviving owners or shareholders can either pay for the business interest outright or through an installment plan. Buyout funds can also be accumulated through the establishment of a sinking fund ‑ a savings plan in which business owners regularly put aside money for the sole purpose of buying shares when they become available.

While this funding arrangement helps money accumulate for the future (while earning interest), borrowing provides the money up front, with interest payments figured into future payments.

But what if death or disability occurs before enough funds have accumulated to meet the buying price? What if borrowing becomes tight because the departure has an adverse affect on business? Can a deceased owner’s estate afford to wait for an installment plan?

This is where insurance comes in. Bought by either the company or by partners, insurance is a way to provide cash when it’s needed. Through a variety of insurance programs such as split-dollar, in which an insured owner and other partners split the cost, tax-advantaged savings can be accomplished now while future payout is guaranteed. Whole life insurance, which builds cash value, can also provide needed funds when events other than death trigger a buyout clause. And many companies now sell disability insurance to specifically meet buy-sell needs.

The existence of a buy-sell plan ensures the orderly transition of a business, and a proper funding vehicle ensures the money will be there when the time comes. Plan for the future now. Your business depends on it.

Guarantees are dependent on the claims-paying ability of the issuing company.

This information is not intended as tax or legal advice. Please consult with your attorney or accountant prior to acting upon any of the information contained in this article.

Keith D. Johnson is an associate of National Financial Services Group ( He focuses on holistic financial planning to help business owners create and preserve multigenerational wealth. Johnson is a registered representative and investment adviser representative of Equity Services Inc. Securities and investment advisory services are offered solely by Equity Services Inc., Member NASD/SPIC, 1050 Crown Pointe Parkway Suite 1000, Atlanta, GA 30338. Reach Johnson at (770) 512-5139 or

Monday, 22 July 2002 09:55

Building Ohio’s future

The competitive nature of today’s business environment requires companies to conduct ongoing assessments. Taking stock ensures business success.

When Gov. Taft asked me to serve as State Development Director, I took stock of the Ohio Department of Development. With an extensive private-sector background, I have initiated a comprehensive assessment to examine the department. I will formulate Ohio’s economic development strategy — one that will build upon the strong foundation of programs that create business growth.

Ohio has enjoyed tremendous economic development success. Our reputation has led U.S. companies to select Ohio for more investments in new facilities and expansions than any other state, based on Ohio’s favorable economy, record low unemployment and strong partnerships between government, the legislature and Ohio’s business community.

Gov. Taft outlined an opportunity agenda, the foundation for the future. Key elements include an increased focus on education and training, a competitive environment for electricity, business assistance programs and continued development of high technology resources.

Education and work force development are critical. Businesses must be able to hire skilled workers. I will forge strong ties between business and higher education, strengthening the department’s training and work force development initiates.

I plan to meet with local elected officials, business leaders, economic development professionals and university and community college presidents to discuss economic and community development issues and gain a better understanding of what the Department of Development can do to help.

There are two issues that must be addresses in the short term if Ohio is to maintain its competitive position in the national and international marketplace. Ohio must renew the Ohio Enterprise Zone and the Manufacturer’s Machinery and Equipment Investment Tax Credit (M&) programs. Both are set to expire shortly and the department is advocating their extension in the FY 2000-2001 biennium budget.

The Ohio Enterprise Zone Program has leveled the playing field and allowed Ohio to compete for business expansion and location projects. It provides cost reductions to business considering new investments and allows local governments to exempt the value of first used personal tangible property.

This offsets the onerous property tax on machinery, equipment and inventory. Without the Enterprise Zone Program, many major investments, such as Daimler-Chrysler-Toledo-Jeep, the Aristech Chemical project in Scioto County and the International Paper project in Clermont County would not have moved forward.

The M&E Tax Credit provides a nonrefundable credit against the Ohio corporate franchise or income tax for manufacturing machinery and equipment purchases made by Ohio companies from July 1, 1995, to Dec. 31, 2000. Since its inception, 2,100 companies in 87 counties have filed more than 3,700 notices of intent to use this credit. Projected new investment from expected manufacturing machinery and equipment purchases, eligible for the credit, is more than $4.9 billion.

These are investments in Ohio’s future, resources designed to assist companies in making their expansion and new location decisions. They have been instrumental in Ohio’s ability to compete for major job retention projects. They can provide a win/win opportunity for companies and residents alike.

The components of Gov. Taft’s opportunity agenda will encourage and support continued growth for Ohio companies and communities. Ohio has reached the pinnacle in the economic development arena.

We are proud of our success; however, we know that now is not the time to become complacent. As the economic development climate and needs of our corporate customers change, we must continue to foster an economic development strategies. I look forward to working with Gov. Taft and his team as we cultivate a business climate prepared to meet the challenges of the new millennium.

C. Lee Johnson is director of the Ohio Department of Development.

Thursday, 28 July 2005 20:00

High security

In many cases, today’s technology is a free pass for fraud. Laser printers can mimic original checks, and dishonest employees — even outside vendors and customers — have developed crafty techniques to crawl through corporate loopholes without getting caught.

Meanwhile, incidents of fraud are increasing. Each week, banks review more cases of check and identify fraud than ever before, especially as computers and printing technology provide avenues for criminals to access company information.

Security measures can prevent financial information from leaking out of authorized hands. Business owners need to establish a system for check authorization, segregate bookkeeping duties, and ensure that all corporate and personal banking information is regulated and stored under lock and key.

Clean out carefully
Fraud can originate in unlikely places. Even company trash bins can serve as a gateway to criminal activity.

Refuse containers are often collection points for valuable corporate documents such as employee records, check copies, voided checks and check registers, tax returns and other documents that reveal financial information.

Do not dispose of these records without first shredding or incinerating them. You can purchase a paper shredder and destroy documents in-house, or outsource the service to a company that will remove trash to a secure Dumpster, where it is incinerated.

Cut out counterfeit checks
Advanced copy machines and laser printing equipment open doors for check duplication. Many small- to mid-sized business use company equipment to print checks, which means they store blank check stock in their facilities. If unauthorized people have access to blank stock, they easily can develop checks for significant dollar amounts and cash or deposit them.

Prevent fraudulent check activity by purchasing quality check stock. Invest in security features such as watermarks, raised seals or marks that can be detected only by black light. While these details might cost more than plain check stock, all it takes is one cashed fraudulent check to make up for the difference.

Also, establish dual accountability when employees sign for check stock. Do not allow only one employee permission to remove stock, print and administer checks. On the same note, limit check signing authority. Only officers and a controller or bookkeeper should hold check-signing authority.

Balance books regularly
Review bank statements immediately, watch for cleared checks and, if possible, view your account for activity daily. Online banking tools allow business owners to check current account status.

By catching mistakes before they are buried under a list of transactions, management is more likely to pinpoint fraudulent activity and prevent future occurrences.

Personal credit cards
It is not uncommon for company officers to give their personal credit card information to key support personnel. But before granting this permission, discuss appropriate use of personal credit cards — perhaps to book airline tickets, hold hotel reservations, purchase gifts for clients or handle personal matters carefully detailed by the manager.

Do not leave use discretion to others who hold your personal credit card.

Lock-and-key storage
Don’t pile bank statements, tax forms or other vital financial records on a desk. Loose documents invite wandering eyes and criminal activity. Labeled folders are also risky resting spots for this information if they are stored in accessible cabinets or desk drawers. Lock up documents or leave bank statements at home to avoid temptation.

Some companies install security cameras, which serve dual roles as watchdogs and preventive devices. Installing cameras in areas where check stock or financial statements are stored is never a bad idea.

Preventive training
Employers can build an in-house security system of sorts by simply training employees to watch for fraudulent activity. Conduct a session to inform workers on common security pitfalls and how the company will address these risks. Explain procedures for check authorization and financial information disposal — and encourage employees to report unusual activity to managers.

Train, don’t just trust, your employees. Your security depends on building a protected corporate environment and communicating the importance of keeping financials under lock and key.

CRAIG JOHNSON is president and CEO of Franklin Bank in Southfield, Mich. Reach him at (248) 386-9860

Monday, 23 May 2005 20:00

Borrowing matters

Commercial lending is still one of the most important functions for banks today. Why? Because thriving businesses are important to communities and economies on all levels.

Commercial banks offer a number of commercial loans, business loans and real estate loans designed to help you and your business grow. When starting or expanding your business, concern and worry are normal. After all, it is your business.

Securing a loan to help it grow may seem intimidating, but it could not be easier.

Credit is the lifeblood of American businesses, especially small and medium-sized businesses. Credit will allow you, the business owner, to build inventory, purchase needed equipment, create new lines of merchandise, purchase real estate and ultimately help your business grow.

Research has shown that aside from personal savings, banks are the next major source of capital for starting new businesses and helping them grow and expand.

Before you go to your bank, prepare the information loan officers are going to be looking for. By arriving prepared, you can speed lender consideration for your application. By presenting your case in the best possible light, you will increase the chances of the bank meeting your financial needs.

For the small and medium-size business owner, enlisting the assistance of your financial counselor (CPA, CFO) is recommended. Below are some general questions to answer that can help simplify the loan-securing process.

* How much money do you need?

* What will the loan be used for, and for how long?

* How are you going to repay the loan, and under what terms?

* Who is applying for the loan? You? Or are other legal entities involved, such as a corporation or a partnership?

* What assets can you pledge to secure the loan?

Develop a written plan

* Write an executive summary of the loan you are applying for.

* Prepare a business plan

* Prepare a marketing plan

* Have two years of financial statements and tax returns for the business and any partners

Finally, you'll want to lay down some groundwork. When seeking a loan for your business, you are essentially asking the bank to become your business partner, with the exception that banks are not as patient as most partners in expecting repayment.

Banks would like to know some additional information about you and your business, to make sure you have the ability to repay the loan. What shape is your business in? Have you been in the red for the last couple years? If so, why do you think that is? Do you have a plan of action in place to get out of the red?

On the reverse side, has your business been doing so well that you can't keep up? How are you going to ensure that quality doesn't suffer?

Small and medium-sized business owners in Southeast Michigan have a significant advantage in seeking a commercial loan. The area has many experienced bankers who understand the local economy and the needs of local businesses.

When shopping for a loan, talk with a number of banks and select one that meets your needs for today and for the future.

Craig Johnson is president and CEO of Franklin Bank, a full-service financial institution that has serviced Southeast Michigan for more than 20 years. Franklin offers its commercial customers many specialized services, including next-day funds availability, low-cost courier service, extended branch hours, Web banking services and a streamlined small business lending program. Reach Johnson or one of Franklin's professional sales associates at (248) 358-4710 or at

Tuesday, 22 March 2005 19:00

Financial needs

Just as when choosing a personal checking account, you should select a business checking account, or package of accounts, based on your company's specific needs. Doing so requires you to step back and analyze how you use your general business checking account.

  • How many checks does your business write in an average month?

  • How many deposits do you make in an average month, and how many individual items are included in those deposits?

  • What is the average monthly balance your company maintains in the account?

  • Do you deal heavily with cash?

  • Do you need to have a branch located near your place of business? Or, can you handle your day-to-day banking through other means, such as a courier, ATM, lockbox for deposits and Web-banking for transfers and daily reconciling?

Weighing the options
The answers to these questions will lead to the beginning of a very specific business solution. Most small to mid-sized businesses are prime candidates for a bank's basic business or free business checking product because their monthly transaction levels -- checks written, deposits made, items deposited -- are low enough to warrant very low or no fees.

Businesses with higher transaction counts -- usually 250 or more total transactions each month -- might be required to open a typical commercial checking account, which is subject to transaction fees. This type of account also offers an earnings credit, based on the average collected balance, that is used to offset total monthly service charges.

With such differences, it is important to shop around before deciding on one bank. Find out what each bank charges per transaction item and what rate it uses to calculate the monthly earnings credit.

For those businesses that are fortunate enough to have excess or unused balances in their account each month, most institutions have expanded business money management programs that combine a business checking with some type of interest-bearing account.

Sweep options are also available. They allow you to automatically transfer excess funds to a business savings, money market or other investment vehicle on a daily basis to help maximize your return on excess balances.

And, what could be more convenient than to be able to manage your business accounts in a real-time, online environment through a business Web-banking setup? As your customers and suppliers continue to move core operations to the Web, being able to conduct similar transactions in real time provides a competitive advantage.

The options for simplifying your business banking are probably more significant than you realize. You just need to be more aware of your product and service needs as a bank customer.

Craig Johnson is president and CEO of Franklin Bank, a full-service financial institution that has served Southeast Michigan for more than 20 years. Franklin offers its commercial customers many specialized services, including next-day funds availability, low-cost courier service, extended branch hours, Web banking services and a streamlined small business lending program. Contact him or one of Franklin's professional sales associates at (248) 358-4710 or via the Web at